UNJUST  TAXATION 


A  compilation  of  facts  and  figures 
showing  injustice  and  inequality  of 
real  estate  taxation  in  the 
City  of  New  York 


By 

SIG.  CEDERSTROM 

201  Montague  Street 
Brooklyn 
1913 


Copyright,  1913, 
by 

SIG.  CEDERSTROM 


3  a 


Cc^ 


Unjust  Taxation 


The  enormous  and  continual  increase  of  the  taxes  on  real  estate  has  reached 
a  point  where  it  demands  the  careful  and  serious  consideration  of  everyone  who 
pays  taxes,  and  everyone  who  has  the  interest  of  our  great  city  at  heart. 

If  it  be  true  in  the  practice  of  medicine,  that  the  successful  treatment  of  disease 
depends,  first  and  foremost,  upon  accurate  diagnosis,  it  is  no  less  true  in  the  treat¬ 
ment  of  a  civic  disorder  that,  at  the  very  outset,  there  be  a  complete  understanding 
of  the  nature  of  the  evil. 

Having  correctly  diagnosed  the  trouble,  the  next  step  is  to  apply  the  appropriate 
remedy.  A  physical  disorder  may  seriously  upset  the  individual,  so  civic  disorder 
may  seriously  upset  the  body  politic.  No  branch  of  our  city  government  is  more 
important  than  the  Department  through  which  the  necessary  revenue  is  raised  for 
the  maintenance  of  that  government.  This  necessary  function  must,  at  all  times, 
be  performed;  and  no  thinking  citizen  objects  to  paying  his  just,  equitable  and 
proper  share  toward  the  maintenance  of  the  government.  But  when  a  point  is 
reached  where  the  individual  is  compelled  to  pay  more  than  his  just  and  reasonable 
proportion  towards  the  maintenance  of  that  government,  the  time  is  at  hand  when 
he  has  a  just  and  proper  complaint,  and  when  he  can  justly  say  that  a  disorder 
exists  in  civic  life,  which  demands  a  remedy,  no  matter  how  drastic  it  may  be. 

This,  in  itself,  might  appear  to  some  to  be  a  simple  complaint;  but  add  to  the 
unjust  taxation  a  condition  which  discriminates  against  certain  taxpayers;  a  depart¬ 
ment  which  imposes  the  taxation,  doing  so  with  an  utter  disregard  of  the  proper 
methods  which  should  be  employed,  and  of  the  laws  by  which  it  should  be  controlled, 
an  unjustifiable  and  unwarranted  increase  in  the  burden  of  taxation,  the  unfair 
assessment  of  ordinary  real  estate,  so  that  other  property  more  favored  may  escape 
taxation,  add  to  all  this  a  lack  of  ordinary  courtesy  that  should  obtain  in  everyday 
business  life — and  we  have  something  of  the  condition  which  now  exists  in  regard 
to  the  taxation  of  our  real  estate.  And  none  will  deny  that  a  serious  disorder  exists 
in  our  body  politic. 

Since  the  general  real  estate  depression  in  the  latter  part  of  1906,  which  has 
practically  continued  up  to  the  present  time,  the  City  Budget,  the  Total  Tax  Levy 
and  the  Tax  Rate  have  annually  shown  a  large  and  steady  increase. 
j  The  Department  of  Taxes  and  Assessments  during  the  same  period  has  annually 
^increased  the  assessed  valuation  of  ordinary  real  estate  for  purposes  of  taxation  at 
an  alarming  rate.  In  the  six  years  from  1906  to  1912,  the  increase  was  $1,953,166,541. 

The  annual  reports  of  the  Department  of  Taxes  and  Assessments  for  the  years 
1907  to  1912,  inclusive,  fail  to  justify  any  of  the  annual  increases  in  assessments  on 
ordinary  real  estate,  as  a  whole.  The  Tax  Commissioners  submit  no  facts  that 
would  justify  the  increases  made  for  the  years  1907,  1908,  1909,  1910,  1911  and 
-  -  1912.  Ample  facts  which  would  justify  a  reduction,  however,  appear  in  the  annual 
reports  of  the  Department  to  the  Mayor,  and  elsewhere. 

That  the  volume  of  business  transacted  in  real  estate  has  gradually  decreased 
since  1906,  is  a  matter  of  record. 

Assessed  valuations  should  not  be  increased  beyond  sane  limits,  upon  the  erro¬ 
neous  assumption  adopted  by  the  Tax  Department,  that  real  estate,  as  a  whole, 
increases  annually  at  the  rate  of  four  or  five  per  cent.  Nor  is  the  contention  well 
founded  that  even  an  eight  per  cent,  increase  would  be  reasonable  and  justifiable. 


1 


The  annual  report  of  the  Department  of  Taxes  and  Assessments,  for  1909, 
page  22,  contains  the  following  statement : 

“Any  consideration  of  the  assessed  value  of  ordinary  real  estate 
must  take  into  account  the  fact  that  the  assessment  is  based  on  the 
evidence  of  value  given  by  sales,  rentals,  etc.,  during  the  preceding 
fifteen  months.  Assessments  must  follow  the  evidence  of  value,  can¬ 
not  precede  it.” 

It  is  the  purpose  here  to  demonstrate  the  incorrectness  of  this  statement, 
by  the  comparison  of  data  and  statements  of  the  Tax  Commissioners  in  the  an¬ 
nual  reports  of  1907  to  1912,  with  such  facts  as  are  a  matter  of  public  record, 
readily  accessible  to  the  department  and  of  which  it  has,  or  should  have, 
full  detailed  data. 

It  is  a  well  known  fact  that  real  estate  values  do  not  increase  upon  a 
declining  market.  Yet,  in  the  face  of  the  assertion  that  increased  assessments 
“must  follow  the  evidence  of  value,  cannot  precede  it”  statistics  show  a  steadily 
declining  market. 

The  Record  and  Guide  shows  the  following  figures : 


Boroughs  of  Manhattan  and  Bronx. 

Transfers  of  Real  Estate. 

Number  of  Conveyances  recorded. 

During  the  year  1906 . 32,040 

During  the  year  1912 . 16,165 

Decrease  . .' . 15,875 

Number  of  mortgages  recorded. 

During  the  year  1906 . 27,625 

During  the  year  1912 . 11,734 

Decrease . 15,891 

Aggregate  amount  of  mortgages  recorded. 

During  the  year  1906 . $445,970,314 

During  the  year  1912 . 355,400,690 

Decrease  .  $90,569,624 


Borough  of  Brooklyn. 
Transfers  of  Real  Estate. 
Number  of  Conveyances  recorded. 


During  the  year  1906 . 46,218 

During  the  year  1912 . 24,349 

Decrease . 21,869 

Number  of  mortgages  recorded. 

During  the  year  1906 . 39,420 

During  the  year  1912 . 19,216 

Decrease . 20,204 


2 


Aggregate  amount  of  mortgages  recorded. 

During  the  year  1906 . $162,574,512 

During  the  year  1912 .  79,063,269 


Decrease  . $  83,511,243 

Taxes  have  kept  pace  with  the  declining  market, — but  in  the  opposite 
direction.  We  have  the  following  figures  from  the  official  report: 

Grand  Total  Budget. 

Year  1912  . $181,090,657 

Year  1906  .  116,805,490 


Increase  in  six  years . $  64,285,167 

Total  Tax  Levy. 

Year  1912  . $150,506,057 

Year  1906  .  94,098,174 


Increase  in  six  years  . $  56,407,883 


The  Tax  Department  reports  tell  us  that  all  increases  in  assessments  on 
ordinary  real  estate  are  easily  explainable  and  any  taxpayer  can  satisfy  himself 
of  the  justice  of  such  increases;  witness  the  following: — 

1907  Annual  Report,  Dept,  of  Taxes — Page  22. 

$377,596,542.  Increase  in  the  assessed  valuation. 

“While  the  Department  is  endeavoring  to  comply  with  the  law  and 
assess  all  real  property  at  the  sum  for  which  it  will  sell  under  ordinary 
circumstances,  such  a  tremendous  increase  as  that  of  this  year  cannot 
be  expected  to  continue  indefinitely ;  and  when,  through  speculation, 
values  are  inflated  without  substantial  foundation,  prudence  is  demanded 
on  the  part  of  the  assessors.” 

1908  Annual  Report,  Dept,  of  Taxes — Page  18. 

$437,490,467.  Increase  in  the  assessed  valuation. 

“The  large  increase  in  the  assessed  value  of  real  estate  this  year  is 
due  more  to  the  attempt  to  enforce  the  law  equally  throughout  the  City 
than  to  an  actual  increase  in  value  since  the  last  assessment  was  made. 

In  ordinary  years  we  should  hardly  expect  an  increase  of  more  than 
five  per  cent.;  whereas,  the  increase  this  year  was  nearly  eight  per 
cent.  The  increase  in  the  assessed  value  of  ordinary  real  estate  exceeds 
the  aggregate  assessed  value  of  real  estate  of  the  five  States  of  Florida, 
Mississippi,  Oklahoma,  Oregon  and  Wyoming,  with  an  area  of  more 
than  eight  times  as  great  as  the  whole  State  of  New  York. 

“There  are  only  nine  states  including  New  York,  in  which  the 
assessed  value  of  ordinary  real  estate  exceeds  the  aggregate  increase 
in  the  assessed  value  of  ordinary  real  estate  in  this  City  for  this  year 
and  last. 

“All  the  States  and  territories  west  of  the  Mississippi  River, 
including  Minnesota  and  Louisiana  in  the  year  1902  had  a  total  assess¬ 
ment  for  ordinary  Real  Estate  of  $5,249,072,325  and  the  assessment 


3 


of  ordinary  real  estate  in  the  City  of  New  York  exceeds  this  amount 
by  nearly  $900,000,000.  The  assessed  value  of  real  estate  in  the  City 
of  New  York,  not  only  increased  rapidly  in  the  aggregate,  but  at  the 
same  time  increased  per  capita,  and  on  the  average  the  increase  in  the 
value  of  New  York  land  amounts  to  $1,000  and  in  taxable  real  estate 
to  $1,500  for  every  baby  born.” 


1909  Annual  Report,  Dept,  of  Taxes — Page  17. 

$115,852,260.  Increase  in  the  assessed  valuation. 

“Because  the  increase  in  the  assessed  value  of  real  estate  has  been 
nearly  $500,000,000  a  year  for  several  years,  it  has  been  said  that 
this  is  a  normal  increase.  It  seems  hardly  probable  that  the  normal 
increase,  without  allowing  for  any  depreciation  in  the  value  of  money 
will  exceed  4  per  cent,  or  between  two  hundred  and  fifty  or  three 
hundred  million  dollars. 

“If  the  value  of  money  continues  to  depreciate  at  the  present  rate, 
the  apparent  increase  may  ordinarily  exceed  this  amount.  The  increase 
in  population  is  about  3  per  cent,  per  annum.  The  increase  in  the 
value  of  real  estate  would  ordinarily  be  somewhat  more  than  this,  but 
not  very  much  more.  The  increase  in  the  value  of  improvements  is 
about  the  same  percentage  annually,  while  the  value  of  land  tends  to 
increase  somewhat  faster  than  population.” 

1910  Annual  Report,  Dept,  of  Taxes — Page  13. 

$233,983,620.  Increase  in  the  assessed  valuation. 

“The  increase  of  $233,983,620  in  the  assessed  value  of  ordinary 
real  estate  is  probably  a  little  below  what  should  be  the  normal  increase 
year  by  year.  It  was  stated  in  our  report  last  year  that  the  normal  in¬ 
crease  should  be  about  four  per  cent,  per  year. 

“This  year’s  increase  is  somewhat  less  than  that,  but  it  is  explained 
on  account  of  the  depression  of  real  estate ,  which  has  continued  during 
the  period  when  our  assessment  zvork  for  this  roll  was  being  made. 
It  is  hoped  that  conditions  will  be  improved  by  the  time  the  next  year's 
roll  is  made.” 

NOTE.  (The  improvement  in  real  estate  conditions  as  the  Tax  Commis¬ 
sioners  evidently  found  them  the  following  year,  exceeded  anything 
in  the  history  of  real  estate  as  a  whole  or  in  any  of  the  Boroughs 
of  New  York  City). 

1911  Annual  Report,  Dept,  of  Taxes — Page  9. 

$719,989,770.  Increase  in  the  assessed  valuation. 

“The  increase  of  $719,989,787  in  the  assessed  value  of  ordinary  real 
estate  is  extraordinary,  and  is  due  to  the  comparatively  small  increases 
made  in  the  years  1909  and  1910,  following  the  depression  of  1907 
and  1908,  and  is  particularly  due  to  the  very  great  effort  made  to  equal¬ 
ize  assessments  throughout  the  City.” 


4 


1912  Annual  Report,  Dept,  of  Taxes — Page  12 


$68,253,882.  Increase  in  the  assessed  valuation. 

“The  small  increase  in  the  assessed  value  of  ordinary  real  estate 
should  be  considered  in  connection  with  the  assessment  of  1911,  anck 
the  increase  for  the  two  years  should  be  averaged.  If  the  increase  for 
1911  is  added  to  the  increase  for  1912,  it  appears  that  the  average  for 
the  two  years  is  still  more  than  the  normal  increase.” 

Notwithstanding  the  unwarranted  statements,  the  Mayor  made  no  protest 
in  any  public  utterance  nor  has  he  offered  any  remedy  to  cure  the  over-valuation 
or  reimburse  the  property  owner  for  any  over-payment  made. 

Mayor  Gaynor,  on  November  21,  1911,  at  the  5th  Ave.  Association  Dinner  in 
his  speech  acknowledged  in  plain,  unmistakable  language  the  inefficiency  of  the 
Tax  Departmental  System  and  Methods,  and  the  Department  as  a  whole  in 
the  past  and  at  that  time.  He  stated  that  Brooklyn  was  over-assessed  for  1911, 
about  $200,000,000.  The  Mayor  never  made  a  truer  statement.  The  Mayor  during 
the  course  of  his  remarks  on  excessive  real  estate  values  said,  “Well,  the 
valuations  probably  did  strike  some  parts  of  the  City  unfairly,  and  this  year 
we  are  correcting  that,  so  that  there  can  be  no  complaint” 

The  increase  for  the  year  1911  was  $719,989,770. 

In  the  report  of  the  Department  of  Taxes  and  Assessments  on  March  31,  1912, 
to  the  Mayor  in  regard  to  1912  Assessments  of  ordinary  real  estate  for  purposes 
of  taxation,  no  reference  is  made  to  any  of  the  remarks  of  the  Mayor  in  regard 
to  1911  excessive  valuations,  instead,  an  apology  is  offered  by  the  Tax  Com¬ 
missioners  for  their  apparently  small  success  in  increasing  the  assessed  values 
of  ordinary  real  estate  for  1912. 

The  net  increase  in  the  assessed  value  of  ordinary  real  estate  for  1912  was 
$68,253,882  (in  all  the  Boroughs),  and  we  are  offered  the  following  apology 
in  the  1912  report  at  page  12. 

“The  small  increase  in  the  assessed  value  of  ordinary  real  estate 
should  be  considered  in  connection  with  the  assessment  of  1911,  and 
the  increase  for  the  two  years  should  be  averaged.  If  the  increase 
for  1911  is  added  to  the  increase  for  1912,  it  appears  that  the  average 
for  the  two  years  is  still  more  than  the  normal  increase.” 


5 


IMPROPER  METHODS 


The  New  York  American — on  January  22,  1912, 
editorially  comments  on  the  tax 
situation,  as  follows: 

THE  AMERICAN’S  crusade  against  excessive 
tax  assessments  on  Brooklyn  real  estate  received 
the  seal  of  success  at  the  annual  banquet  of  the 
Brooklyn  Board  of  Real  Estate  Brokers  on  Saturday. 
Mr.  Lawson  Purdy,  president  of  the  Tax  Board, 
confirmed  in  freer  and  franker  terms  the  admission  made  to  The  Ameri¬ 
can  a  month  ago.  He  told  the  Brooklyn  real  estate  men,  that  the  cases 
of  excessive  assessment  were  many,  thanked  them  for  assistance  they 
had  rendered  in  making  corrections  and  offered  explanations  as  to 
how  it  all  happened. 

The  American  must  still  insist  that,  quite  apart  from  special  cases 
of  over-assessment,  the  whole  system  can  be  and  ought  to  be  over¬ 
hauled  and  improved.  Especially  ought  the  office  of  Deputy  Tax  Com¬ 
missioner  to  be  held  by  men  specially  qualified  as  real  estate  experts. 

The  editorial  referred  to  the  following  article  in 

THE  NEW  YORK  AMERICAN— JANUARY  21,  1912. 

Lawson  Purdy,  president  of  the  Tax  Board  in  addressing  the  mem¬ 
bers,  admitted  that  in  many  instances  assessments  had  been  placed 
too  high  a  figure.  He  thanked  the  real  estate  men  for  assistance  that 
they  had  rendered  in  making  correct  valuations,  and  said : 

“The  conditions  confronting  the  Tax  Department  during  the  last 
two  years  have  been  peculiarly  difficult.  The  assessment  of  1911  was 
made  in  the  Summer  and  Autumn  of  1910  and  was  based  on  the  sales, 
mortgages  and  other  transactions  of  preceding  years.  When  the  Board 
off  Tax  Commissioners  was  engaged  last  Winter  in  acting  upon  the 
applications  for  reductions  of  assessments  they  were  frequently  confronted 
with  the  fact  that  property  which  had  been  purchased  for  $10,000  could 
not  be  resold  for  $8,000.  The  assessment  had  been  based  on  the  pur¬ 
chase  at  $10,000.” 


Mr.  PURDY’S 

FRANK 

ADMISSION 


6 


Following  is  a  report  of  an  interview  with  Tax  Commissioner  Wall,  published 
in  the  Brooklyn  Daily  Eagle  on  December  15,  1911 : 

Wall  on  Real  Estate  Values 

Tax  Commissioner  Comments  on  Cheapness  of  Brooklyn]  Land. 

“It  is  an  unfortunate  fact  that  land  is  cheaper  in  Brooklyn,  com¬ 
paratively  speaking,  than  anywhere  else  in  North  America.  Even 
farm  land  has  advanced  more  in  value  during  the  last  fifteen  years. 

Why  does  this  condition  exist?  Many  people  say  that  it  is  because 
public  sentiment  in  Brooklyn  has  been  for  forty  years  or  more  molded 
and  dominated  by  narrow,  selfish  and  provincial  interesets. 

“That  may  or  may  not  be  true,  at  any  rate  the  condition  is  not 
new  and  not  due  to  high  assessments.  It  seems  as  though  there  should 
be  a  change  for  the  better  soon,  and  that  land  purchased  at  present 
prices  should  realize  for  the  purchaser  a  handsome  profit. 

“Manhattan  real  estate  experts  calculate  that  land  occupied  by  stores 
is  worth  about  twenty  times  the  annual  rental  of  the  ground  floor. 

If  anyone  will  try  and  apply  that  rule  to  land  in  Brooklyn  they  will 
see  how  comparatively  low  the  actual  selling  price  is  here. 

“What  Brooklyn  appears  to  need  is  intelligent,  unselfish,  optimistic 
leadership.  Let  us  hope  that  Dr.  Hillis  and  his  ‘Beautiful  Brooklyn 
Committee’  will  supply  that  leadership.” 

Commissioner  Wall  says  that  values  are  declining  in  Brooklyn — but  still 
taxes  go  up. 

The  increased  assessed  valuation  in  Brooklyn  in  six  years,  1907  to  1912,  appears 
as  follows : 

Total  increase  assessed  value  of  land  about  72  per  cent  amounting  to ...  $329,845,908 
Total  increase  assessed  value  of  buildings  about  42  per  cent  amounting  to  233,658,334 

About  57  per  cent,  in  six  years,  increase  in  the  - 

VALUE  LAND  AND  BUILDINGS  By  the  Tax  Commissioners. $563, 504, 242 


At  a  dinner  given  by  the  Mechanics  and  Traders  Exchange  of  Brooklyn  on 
February  3,  1911,  Tax  Commissioner  Wall — 

Raps  Mortgage  Gamblers 

Speculative  Methods  Bad,  Says  Wall  at  Dinner  of  Builders. 

Mr.  Guider,  the  toastmaster  introduced  Judson  G.  Wall,  the  tax 
commissioner,  who  spoke  on  the  Brooklyn  tax  situation. 

Mr.  Wall  defended  the  department  against  criticism,  saying  that 
the  men  who  made  the  valuations  were  pushed  for  time  and  did  as 
well  as  could  be  expected  in  the  circumstances. 

“If  the  builders  of  Brooklyn  would  get  together  and  devise  a  way  to 
do  away  with  stupid  building,  and  with  gambling  in  second  mortgages,” 
the  speaker  said,  “the  borough  would  have  little  to  complain  of.  The 
correction  of  these  evils  would  render  unnecessary  any  change  in  the 
taxation  for  The  last  year.  The  taxes  have  been  criticised,  but  in  the 
main  they  art:  fair  and  just.” 

From  the  Brooklyn  Daily  Eagle,  February  14,  1911. 


7 


During  the  course  of  Tax  Commissioner  Wall’s  remarks  regarding  the  Tax 
Department,  at  the  dinner,  he  was  reported  in  the  Standard  Union  as  saying 
the  following: 

“It  is  not  very  strange  that  we  should  fall  by  the  wayside  once  in  a 
while,”  he  argued. .  “Any  department  is  liable  to  get  into  a  bad  condi¬ 
tion  occasionally.  If  the  proper  supervision  is  not  maintained,  there 
is  no  telling  what  will  happen.  That  is  the  reason  the  Board  of  Tax 
Commissioners  used  so  much  care  this  winter  in  directing  the  work. 

A  housecleaning  was  necessary.  When  the  men  found  that  the  com¬ 
missioners  were  standing  by. them  their  efficiency  increased  immeasur¬ 
ably” 

At  least  some  people  are  alive  to  the  injustice  of  the  tax  question. 

John  Pullman,  known  as  the  Dean  of  Brooklyn  Real  Estate  Brokers,  in  a 
letter  to  the  Brooklyn  Eagle,  published  December  9,  1911,  among  other  state¬ 
ments  in  regard  to  the  1911  assessments,  said: 

“Great  wrong  has  been  done  to  the  Borough.  We  were  informed 
in  the  first  month  of  the  year  by  the  tax  commissioners  that  real  estate 
had  increased  $390,000,000  in  Brooklyn  during  the  year  1910,  when  real 
facts  are  that  real  estate  was  not  worth  as  much,  but  worth  at  least  in 
many  cases,  from  10  to  25  per  cent,  less,  and  I,  like  many  tax-payers, 
feel  that  great  wrong  has  been  done  our  borough. 

“From  my  personal  knowledge  I  know  real  estate  will  sell  from 
10  per  cent,  to  25  per  cent,  less  than  it  did  the  past  three  years, 
and  is  bringing  from  10  per  cent,  to  20  per  cent,  less  rent  than  it 
has  brought  the  past  two  or  three  years,  and  when  you  come  to  assess 
income  property,  the  income,  in  almost  all  cases  is  what  establishes 
the  value.”  t 

John  Pullman  is  considered  an  authority  on  all  matters  pertaining  to  realty. 
He  has  resided  in  the  Borough  of  Brooklyn  for  the  past  40  years  and  most 
of  the  time  has  been  engaged  in  renting,  leasing,  buying,  selling,  placing  mort¬ 
gage  loans  and  appraising  real  estate. 

Frank  Bailey,  Vice-President  of  the  Title  Guarantee  &  Trust  Co.,  in  a  signed 
article,  published  in  The  Evening  Post,  December  31,  1912 — Annual  Real  Estate 
Review — Mr.  Bailey  makes  the  following  statements  in  reference  to  Brooklyn’s 
obstacles : 


“Real  estate  as  a  whole  is  not  doing  well.  The  reason  is  not 
hard  to  find — first,  Brooklyn  suffered  two  years  ago  from  an  increase 
in  taxation  which  was  unwarranted  and  unjustified.  The  valuations 
made  were  theoretical  and  not  at  all  practical.  Thousands  of  pieces 
of  property  were  assessed  from  10  to  40  per  cent,  more  than  they  could 
be  sold  for,  and  the  cost  of  having  that  assessment  reduced  was  so 
great  that  the  city  practically  took  from  the  owners  of  the  property 
an  amount  of  forced  tax  contribution  they  were  not  entitled  to  pay. 

SELLING  BELOW  ASSESSMENTS. 

“Some  feeble  efforts  were  made  to  correct  that  assessment  during 
1911  and  1912,  but  at  the  present  time  Brooklyn  is  assessed  a  material 
amount  more  than  the  value  of  its  property. 

******** 


8 


“There  is  not  a  single  day  that  a  contract  does  not  come  in  to  my 
office  where  the  assessment  is  not  10  to  20  per  cent,  more  than  the  price 
at  which  the  property  is  sold. 

******** 

“The  destructive  results  of  this  unjust  increase  will  be  felt  for  ten 
years.” 

Governor  Sulzer,  in  a  speech  at  the  first  annual  dinner  of  the  Allied  Real 
Estate  Interests,  held  at  the  Waldorf-Astoria  on  February  28,  is  quoted  in  the 
Brooklyn  Daily  Eagle  of  March  first,  as  follows: 

“A  serious  condition,  as  you  know,  now  exists  among  real  estate  owners, 
particularly  in  the  cities  of  the  State,  on  ac.ount  of  the  present  heavy  taxation. 
There  is  at  present  practically  no  market  for  the  sale  of  real  property  at  the  valu¬ 
ations  on  the  tax  assessment  rolls. 

“From  an  investigation  of  these  matters,  I  know  that  while  the  stagnation  in 
real  estate  business  may  be  general  elsewhere,  in  the  City  of  New  York,  largely 
owing  to  the  enormous  increase  in  the  assessments  on  real  property,  there  has  been 
created  a  condition  of  distress  among  our  taxpayers  and  rentpayers  without 
precedent  in  the  history  of  the  metropolis.” 

JUSTICE  FREDERICK  E.  CRANE,  OF  THE  SUPREME  COURT,  SAYS 
STAGNANT  VALUES  ARE  “COMMON  KNOWLEDGE.” 

(From  the  N.  Y.  Law  Journal ,  May  1,  1913.) 

By  Crane,  J. 

C.  I.  Jockey  Club  v.  Purdy — The  relator  in  this  case,  the  Coney  Island  Jockey 
Club ,  has  been  assessed  upon  its  property  at  Sheepshead  Bay  for  the  taxes  of  1913 
at  $2,470,275,  and  it  has  brought  this  proceeding  in  order  to  procure  a  reduction 
therein  upon  the  ground  of  overvaluation.  As  it  developed  from  the  testimony  of 
one  of  the  relator’s  witnesses  that  many  of  the  parcels  of  lots  assessed  were  under¬ 
valued  while  others  were  overvalued,  and  these  practically  counterbalanced,  it  was 
tacitly  agreed  upon  the  hearing  to  eliminate  from  consideration  all  parcels  with  the 
exception  of  the  part  known  as  the  race  course,  or  block  7405,  lot  l,  assessed  as  one 
piece  and  containing  335  acres.  The  assessment  upon  this  parcel  for  this  year’s 
taxes,  after  certain  deductions,  is  $2,130,000,  including  $8,750  for  buildings.  The 
value  placed  upon  this  tract,  figured  according  to  acreage,  by  Robert  Huntley  an 
expert  for  the  relator,  was  $1,537,500,  and  by  another  expert,  David  A.  Kelly, 
figured  according  to  lots,  $1,583,420.-  The  city’s  expert,  George  F.  Byrnes,  places 
the  value  at  $2,396,635,  or  $260,000  over  the  assessment.  I  have  oeen  much  im~ 
pressed  with  the  case  as  presented  by  the  relator,  as  the  figures  for  this  tract  as 
given  by  the  expert  witnesses  correspond  very  nearly  to  the  assessment  and  values 
of  previous  years.  In  1909  this  same  tract  was  assessed  for  $1,161,400,  and  in  1910 
for  $1,550,000.  There  has  been  no  , change  whatever  in  the  nature  and  condition  of 
this  property  since  these  years.  It  is  unimproved  land,  without  streets  or  grading, 
formerly  used  for  a  race  track,  and  adjoining  Ocean  avenue,  not  very  far  from  the 
shore  of  Sheepshead  Ba}'.  It  is  common  knowledge  that  property  in  the  Borough 
of  Brooklyn  and  this  vicinity  has  not  materially  increased  in  value  during  the  Iasi 
four  or  five  years,  and  the  testimony  of  Mr.  Byrnes,  the  city  expert,  upon  this  point 
is  that  from  1907  prices  have  practically  been  at  a  standstill,  “no  increase  or  de¬ 
crease,  just  remained  at  the  figure  they  were  in  1907—  prices  and  activity .”  It  is 
not  to  be  presumed  that  the  assessors  in  previous  years  were  derelict  in  their  duty 
and  almost  a  million  dollars  below  the  actual  value  in  their  estimate,  but  it  is 
rather  to  be  surmised  that  some  error  has  crept  into  the  present  method  of  com¬ 
putation  when  it  is  virtually  admitted  that  general  real  estate  values  in  this  vicinity 


9 


nave  not  increased.  The  testimony  of  the  relator’s  experts,  therefore,  being  in  har¬ 
mony  with  the  official  action  of  tnese  other  years,  1  find  that  Mr.  Byrnes  bases  his 
conclusions  upon  elements  winch  1  ao  not  believe  can  be  considered  in  arriving  at 
the  present  value,  in  the  first  place,  he  bases  his  vafues  upon  knowledge  of  the 
community,  sales  in  and  about  that  section,  “and  if  I  may  be  permitted  to  say  it, 
my  confidence  in  the  future  of  Sheepshead  Bay.”  Again,  he  states  that  he  looks  for 
a  good  increase  of  business  almost  immediately  as  the  result  of  the  signing  of  the 
subway  contracts.  The  future  of  Sheepshead  Bay  as  the  witness  pictures  it  in  his 
testimony,  and  the  increase  of  business  awaiting  the  subway  has  not  yet  manifested 
itself ;  1  therefore  do  not  see  how  it  can  be  an  element  of  actual  present  value.  It 
may  be  that  a  speculator  would  be  willing  to  hold  this  property  on  the  chance  of 
such  a  future  change,  but  there  have  been  no  sales  in  the  neighborhood  or  any 
developments  to  indicate  a  market  upon  any  such  theory.  When  the  change  does 
come  and  the  values  do  increase  by  reason  thereof,  of  course  the  assessment  of  this 
property  will  increase  accordingly ,  but  there  is  no  occasion  for  anticipating  it. 
Moreover,  the  value  placed  upon  the  property  by  Mr.  Byrnes  is  affected  by  the  sup¬ 
position  that  a  land  company  of  large  financial  proportions  stands  ready  to  buy 
this  tract  as  a  whole  and  develop  it  into  a  fine  residential  section.  At  page  270 
of  the  stenographer’s  minutes  the  witness  testifies  as  follows:  “I  expect  that  if  a 
development  company  purchased  that  property  and  developed  it  into  a  first-class 
residential  section,  that  they  would  not  lose  any  money  on  the  proposition;  that 
this  property  is  one  of  the  largest  and  most  costly  pieces  of  undeveloped  property 
on  Long  Island.  And  if  cut  up  into  building  lots,  with  residences  built  upon  it, 
and  so  forth,  why  it  would  improve  the  whole  community  generally,  and  inci¬ 
dentally  I  have  every  confidence  that  it  would  be  a  good  salable  proposition.  The 
amount  of  capital  necessary  to  carry  out  the  witness’  idea  can  be  gathered  from 
his  estimate  that  after  development  it  would  be  worth  about  $4,000,000.  The  value 
of  property  consisting  of  vacant  lots  can  hardly  be  estimated  upon  imaginary  condi¬ 
tions  that  capitalists  stand  ready  to  improve  the  property  and  that  it  has  been 
improved  by  the  expenditure  of  large  sums  of  money  and  therefore  is  worth  in  lot 
value  the  increase  zuhich  such  development  brings  to  it  and  the  surrounding  neigh¬ 
borhood.  No  doubt  ah  that  Mr.  Byrnes  says  will  come  true,  but  I  do  not  find 
sufficient  evidence  of  its  nascency  to  warrant  estimating  present  values  upon  it. 
/  shall  therefore  reduce  the  assessment  on  block  7405,  lot  1,  to  $1,592,170,  which  is 
Mr.  Kelly’s  estimate,  plus  $3,750  for  the  buildings. 

President  Lawson  Purdy  of  the  Board,  who  has  occupied  that  position  since 
1907,  in  an  article  written  by  him  and  published  June  29,  1907,  in  the  “Record 
and  Guide,”  the  recognized  real  estate  publication,  New  York  City,  among  other 
statements,  in  regard  to  the  assessments  of  real  estate  for  purposes  of  taxation 
in  the  City  of  New  York,  said  as  a  final  analysis  of  the  subject: 

“The  equitable  assessment  of  real  estate  is  the  foundation  of 
the  City’s  credit  and  the  basis  of  its  economic  welfare.” 

Tt  naturally  follows — the  City’s  credit  and  its  economic  welfare  are  the  very 
foundation  of  realty  values  and  of  the  most  vital  importance  to  real  estate  owners. 

If  “the  equitable  assessment  of  real  estate  is  the  foundation  of  the  City’s 
credit  and  the  basis  of  its  economic  welfare”  what  question  could  be  more 
important  to  the  city  as  a  whole  than  the  correction  of  the  tax  evil? 

Disregard  of  Law 

The  Tax  Commissioners  have  never  attempted  even  to  justify  the  increase 
of  1911  with  any  facts,  either  publicly  or  in  their  annual  report  for  1911  to  the 
Mayor  and  they  appear  to  have  shown  a  disregard  for  the  law. 


10 


The  New  York  Times,  November  22,  1911,  quotes  Mayor  Gaynor  as  follows: 

“A  year  ago,  Purdy  and  myself  and  his  whole  board,  we  got  our  heads  together, 
and  we  determined  that  we  would  equalize  values  throughout  the .  whole  city. 
It  was  a  fact  that  the  values  were  very  unequal  all  over  the  city.  They  had  as 
many  knolls  as  the  surface  of  the  ground  has  throughout  the  city.  The  values  ran 
up  in  a  knoll  here  and  ran  down  in  a  hollow  there,  not  following  the  knolls  and 
nollows  in  the  ground,  but  something  like  it,  and  so  it  was  all  over  the  city,  and 
I  am  sorry  to  say  that  some,  by  favoritism,  procured  by  political  influence, 
(I  think  that  is  what  it  is  called,  with  the  accent  on  the  second  syllable  very  often) 
and  I  am  still  very  sorry  to  say  sometimes  by  money,  had  their  values  altogether 
too  low. 

“I  said  something  about  that  during  the  campaign,  and,  when  I  became  Mayor, 
said  that  that  would  come  to  an  end,  and  in  doing  that  equalizing  process 
we  ran  values  up  throughout  the  city  $800,000,000.  (Eight  hundred  million  dollars). 

“Well,  it  looks  dreadful  because  $250,000,000  is  normal.  Eight  hundred 
millions!  and  a  great  many  people  complain. 

“Well,  the  valuation  probably  did  strike  some  parts  of  the  city  unfairly, 
and  this  year  we  are  correcting  that,  so  that  there  can  be  no  complaint. 

“I  freely  acknowledge  that  the  Borough  of  Brooklyn  had  too  much  advance 
in  that  raising  of  $800,000,000  of  values.  Relative  to  Manhattan,  we  added  alto¬ 
gether  too  much  there — probably  $200,000,000,  maybe  not  so  much — but  some¬ 
thing  approaching  that.  That  will  all  be  attended  to,  and  be  equalized  and 
distributed  over  the  city  in  due  time.  So  that  that  $800,000,000  increase  was 
made  to  equalize  the  values,  but,  at  the  same  time  with  an  eye  to  the  building 
of  the  subways,  which  a  great  many  people  want  built  as  soon  as  possible.” 

The  1911  increase  in  assessments  of  real  estate,  as  a  whole,  can  be  sus¬ 
tained  neither  in  theory  or  fact,  nor  can  any  of  the  City  Officials  or  City 
Employees  produce  facts  of  any  description  or  kind  whatsoever,  that  will 
even  tend  to  justify  the  increase. 

The  City  Charter  plainly  says : 

“Real  Estate  assessed  valuations  for  the  purposes  of  taxation  shall 
be  for  the  sum  which  real  estate  would  sell  under  ordinary  circum¬ 
stances.” 

The  provisions  of  the  Charter  are  plain;  then  why  should  they  be  dis¬ 
regarded  and  Tax  Departmental  System  exist,  so  elastic  and  so  cunningly 
devised  that  inequitable  and  excessive  valuations  result,  which  cannot  be 
sustained?  Is  it  in  order  to  meet  budget  demands,  to  increase  the  borrowing 
capacity  or  for  any  other  purposes  which  public  officials  may  deem  expedient? 

The  increase  in  1911  may  seem  light  to  Mayor  Gaynor,  as  it  only  means  about 
12  per  cent,  increase,  as  a  whole,  on  the  total  assessment  of  ordinary  real  estate 
•for  1910,  or  about  three  times  the  normal  increase  Tax  Commissioners  have 
assumed  to  exist. 

The  Tax  Commissioners  have  so  far  failed  to  produce  any  facts  to  sustain  their 
statements  that  the  City  of  New  York  has  a  normal  increase  of  $250,000,000  per 
annum  in  real  estate. 

There  are  over  500,000  separately  assessed  parcels  in  New  York  City,  an  in¬ 
crease  on  an  average  of  only  $1,500  upon  each  parcel  would  amount  to  $750,000,000. 
Admitting  the  Tax  Commissioners’  contention  of  a  normal  increase  of  4  per  cent, 
to  5  per  cent,  a  year — or  an  average  of  $500  on  each  parcel— the  excess  valuation 
would  still  be  $1000  on  each  parcel,  or  over  $500,000,000  excess  assessment  on  real 
estate  as  a  whole. 


11 


The  average  assessed  value  per  parcel  in  Brooklyn  is  about  $7,500.  Suppose 
$2,500  excess  valuation  existed  on  each  parcel  of  the  200,000  separately  assessed 
parcels  in  Brooklyn ;  the  additional  tax  levied  on  each  $2,500  would  amount  to 
$46.25.  with  a  tax  rate  of  1.85. 

The  employment  of  a  real  estate  appraiser  to  appear  before  the  tax  commission¬ 
ers  at  a  hearing  on  protests,  would  incur  an  expense  of  not  less  than  $25 — and  this 
without  any  guarantee  of  the  granting  of  a  hearing  upon  the  parcel  in  question  or 
of  securing  a  reduction. 

Should  the  Tax  Department  voluntarily  offer  to  make  a  reduction  of  $1,000,  it 
would  be  good  business  at  present  to  accept  it.  On  any  $1,500  excess  valuation, 
the  usual  cost  of  securing  a  reduction  is  now  greater  than  the  saving  in  taxes, 

200,000  parcels  with  average  of  $1,500  excessive  valuation  would  amount  to 
$300,000,000,  and  in  excessive  tax  levies  about  $5,500,000. 

The  discretionary  powers  conferred  by  the  City  Charter  on  the  Tax  Com¬ 
missioners  are  used  in  such  a  way  as  to  place  the  whole  burden  of  proof  as 
to  the  actual  values  upon  the  taxpayer  who  protests,  while  the  Tax  Com¬ 
missioner  makes  no  effort  to  sustain  the  Department’s  valuations. 

The  Tax  Report  for  1907,  at  Page  20,  says :  “More  important  than  the  law 
is  the  departmental  system.  A  good  system  can  only  be  evolved  by  years  of  con¬ 
scientious  work  by  permanent  public  servants.  The  methods  of  the  Department 
are  too  little  known  in  our  own  city.” 

The  Tax  Commissioners  tell  us  that  “equitable  assessment  of  real  estate  is  the 
foundation  of  the  city’s  credit,  and  the  basis  of  its  economic  welfare.  The  provi¬ 
sions  of  the  Charter  are  perfectly  plain,  and  intended  to  assure  equitable  assess¬ 
ments.  And  it  is  through  the  Tax  Department  that  the  city  annually  raises  nearly 
$200,000,000;  and  the  officials  who  have  this  tremendously  important  duty  imposed 
upon  them  consider  that  a  “departmental  system  is  MORE  IMPORTANT  THAN 
THE  LAWP 


Unwarranted  Increases  and  Excessive  Assessed  Valua¬ 
tions  of  Ordinary  Real  Estate  for  Purposes 
of  Taxation 

The  fact  that  real  property  is  over-assessed  is  clearly  demonstrated  by  the  fol¬ 
lowing  data : 

The  Annual  Reports  of  the  Department  of  Taxes  and  Assessments  show  the 
following  figures  in  assessed  valuations : 

Total  Assessed  Value  Ordinary  Real  Estate  in  all  of  the  Boroughs, 
exclusive  of  “Special  Franchises”  and  “Real  Estate  of  Corporations” 


Year  1912  .  $7,279,579,651 

Year  1906  .  5,326,413,110 

The  increase  for  six  years,  inclusive .  $1,953,166,541 


12 


DEPARTMENT  OF  TAXES  AND  ASSESSMENTS.  1909  ANNUAL  RE¬ 
PORT,  PAGE  17. 

“Any  consideration  of  the  assessed  value  of  ordinary  real  estate 
must  take  into  account  the  fact  that  the  assessment  is  based  on  the 
evidence  of  value  given  by  sales,  rentals,  etc.,  during  the  preceding 
fifteen  months.  Assessments  must  follow  the  evidence  of  value  and 
cannot  precede  it.” 

In  the  face  of  this  statement  from  the  Tax  Department,  we  find  that  the 
condition  of  the  real  estate  market  absolutely  fails  to  show  any  justification 
for  increased  valuations.  No  person  could  reasonably  predicate  increased 
valuations  in  the  face  of  a  declining  market  when,  as  will  hereinafter  be 
shown,  the  “Record  and  Guide”  and  other  real  estate  publications  that  are 
accepted  as  authentic,  show  a  steady  and  continuous  decrease  in  the  total 
number  of  mortgages,  the  total  number  of  conveyances,  and  the  amount  of 
money  loaned  on  bond  and  mortgage,  since  the  year  1905.  The  statement, 
“Assessments  must  follow  the  evidence  of  value,  cannot  precede  it”  in  the 
1909  report  must  therefore  fall  of  its  own  weight. 

In  the  face  of  this  declining  real  estate  market,  we  have  a  steady  increase  in  the 
annual  tax  budget,  in  the  total  tax  levy  and  in  the  annual  tax  rate. 

THE  EAGLE  ALMANAC,  1913,  shows  a  steady  increase  in  the  Tax  Budget, 
in  the  Tax  Levy,  and  in  the  Tax  Rate  from  1906  to  1912 : 


GRAND  TOTAL 

BUDGET. 

YEAR. 

TOTAL  TAX  LEVY. 

$116,805,490 

1906 

$94,098,174.42 

130.421,505 

1907 

101,950,253.58 

143,572,266 

1908 

116,542,896.09 

156,545,148 

1909 

122,745,210.17 

163,128,270 

1910 

131,478,283.11 

173,967,835 

1911 

142,240,654.56 

181,090,657 

1912 

150,506,057.47 

The  annual  reports  of  the  Department  of  Taxes  and  Assessments  from  1905  to 
1912  show  the  following  increases  in  assessed  valuations  of  ordinary  real  estate 
in  the  Boroughs  of  Manhattan  and  the  Bronx: 

INCREASE  BOR.  MANHATTAN. 


TAX  RATE. 

YEAR. 

LAND. 

BUILDINGS. 

TOTAL. 

1.49 

1905  .. 

$80,300,920 

1.47 

1906  .. 

234,999,750 

1.48 

1907  .. 

...  .$112,121,360 

$100,745,360 

212,866,720 

1.61 

1908  .. 

. . .  .  99,331,980 

73,080,150 

172,412,130 

1.67 

1909  . 

. . .  .  22,552,590 

32,337,065 

54,889,655 

1.75 

1910  .. 

. . .  75,454,269 

52,786,580 

128.240,849 

1.72 

1911  .. 

....  209,611,518 

32,148,057 

241,759,575 

1.83 

1912  .. 

....  13,039,815 

30,048,417 

43,088,232 

Total  .$532,111,532 

$321,145,629 

Increase  in  land  for  six  years . 

.$532,111,532 

Increase 

in  buildings  for  six  years _ 

.  321,145,629 

Total  increase,  land 

and  buildings, 

1906-1912 . 

.$853,257,161 

13 


MANHATTAN. 


Total  assessed  value,  land  and  buildings — ordinary  real  estate,  1912 _ $4,675,641,742 

Total  assessed  value,  land  and  buildings — ordinary  real  estate,  1906  _  3,822,384,581 

Increase,  1906-1912 . $  853,257,161 


INCREASE  BOR.  OF  BRONX 


YEAR. 

LAND. 

BUILDINGS. 

TOTAL. 

1905  . 

$  9,076,096 

1906  . 

75,557,509 

1907  . 

. $  7,090,334 

$  20,232,094 

27,322,428 

1908  . 

.  26,864,973 

15,481,715 

42,346,688 

1909  . . 

.  8,764,106 

9,453,484 

18,217,590 

1910 . 

.  14,084,713 

18,086,398 

32,171,111 

1911  . . 

.  64,905,070 

33,372,894 

98,277,964 

1912 . 

.  2,265,201 

12,664,084 

14,929,285 

Total  . . . . 

. $123,974,397 

$109,290,669 

BRONX. 

Total  assessed  value,  land  and  buildings — ordinary  real  estate,  1912 - $555,674,643 

Total  assessed  value,  land  and  buildings — ordinary  real  estate,  1906 _  322,409,577 

Increase,  1906-1912 . $233,265,066 


In  the  face  of  these  large  increases  in  the  Tax  Budget,  Tax  Levy  and  Tax  Rate, 
and  assessed  valuations  on  ordinary  real  estate,  we  have  a  steady  decline  in  the 
real  estate  market,  as  shown  by  the  “Record  and  Guide” : 


“RECORD  &  GUIDE”  FIGURES  MANHATTAN  AND  BRONX. 


TOTAL  NO.  OF 

TOTAL  NO.  OF 

AMT.  OF 

YEAR. 

CONVEYANCES. 

MORTGAGES. 

MORTGAGE. 

1905.... 

.  34,617 

30,527 

$565,109,682 

1906.... 

.  32,040 

27,625 

445,970,314 

1907. . . . 

.  20,697 

19,466 

377,372,445 

1908.... 

.  16,982 

15,395 

308,096,145 

1909.... 

.  17,587 

16,601 

365,046,964 

1910. . . . 

.  16,797 

14,680 

361,886,960 

1911.... 

.  16,111 

13,120 

353,691,695 

1912. . . . 

.  16,165 

11,734 

335,400,690 

THE  BOROUGH  OF  BROOKLYN  may  be  used,  more  or  less,  to  show  the 
conditions  in  the  other  Boroughs  regarding  tax  increases  and  inactivity  in  real 
estate  during  the  period  1906  to  1912,  inclusive. 


14 


BOROUGH  OF  BROOKLYN. 

Total  Assessed  Value  of  Ordinary  Real  Estate. 

Land  and  Buildings,  1912 . $1,556,281,439 

Land  and  Buildings,  1906  .  992,777,197 


Increase  1906  to  1912 — about  57  per  cent . $  563,504,242 

Total  increased  assessed  valuation  of  land  (about  72  per  cent.) . $328,845,908 

Total  increased  assessed  valuation  of  buildings  (about  42  per  cent.)....  233,658,334 


Total  increase  value,  land  and  buildings  (about  57  per  cent.), 

1906  to  1912 . $563,504,242 


The  total  number  of  instruments  filed  annually  in  the  Register’s  Office, 
affecting  real  estate  in  the  Borough  of  Brooklyn  from  1906-1912,  is  shown 
in  the  following  table: 


1906  .  117,111 

1907  .  95,357 

1908  .  81,841 

1909  .  90,008 

1910  .  90,018 

1911  .  82,170 

1912  .  78,075 


Total,  1906 .  117,111 

Total,  1912 .  78,075 


Decrease .  39,036 


The  annual  reports  of  the  Department  of  Taxes  and  Assessments  show  the  in¬ 
creases  in  the  Borough  of  Brooklyn  to  be  as  follows : 

BOROUGH  OF  BROOKLYN. 


TOTAL  INCREASE  IN 


TAX  RATE. 

YEAR. 

THE  LAND  VALUE. 

1.55 

1907... 

...  $  29,599,483 

1.67 

1908... 

. . .  90,734,155 

1.73 

1909... 

7,873,990 

1.81 

1910... 

...  11,629,509 

1.75 

1911... 

...  197,997,868 

1.87 

*  Decrease. 

1912... 

. . .  *7,989,097 

Total . 

...  $329,845,908 

TOTAL  INCREASE 

TOTAL  INCREASE 

IN  BUILDINGS. 

LAND  AND  BUILDINGS. 

$49,649,705 

$79,249,188 

47,528,720 

138,262,875 

21,560,790 

29,434,780 

35,020,872 

46,6 50,381 

71,410,194 

269,408,062 

8,488,053 

498,956 

$233,658,334 

$563,504,242 

Total  assessed  value  land  and  buildings,  1912 . $1,556,281,439 

Total  assessed  value  land  and  buildings,  1906 .  992,777,197 


Increase,  1906-1912 


$  563,504,242 


15 


Annual  Reports  of  the  Bureau  of  Buildings,  Borough  of  Brooklyn,  show  a 
decline  in  additional  assets  to  the  City  in  the  way  of  new  buildings  erected. 

The  increase  in  assessed  valuation  of  buildings  in  the  Borough  of  Brooklyn  are 
given,  in  the  following  table;  note  the  results  of  a  comparison  with  the  figures  as 
shown  in  the  official  reports  of  the  Building  Bureau : 

The  fact  that  old  buildings  do  not  increase  in  value  has  been  practically  ad- 


in  the 

annual  reports  of  the  Tax 

Commissioners. 

INCREASE  IN  ASSESSED 

NEW  BLDGS. 

NEW  BLDGS. 

COST  OF 

VALUE  OF  BUILDINGS 

YEAR. 

COMMENCED. 

COMPLETED. 

BUILDINGS. 

BY  TAX  DEPARTMENT. 

1906.. 

. 7,070 

7,067 

$47,950,276 

1907.. 

. 6,713 

7,775 

59,666,977 

$49,649,705 

1908.. 

. 6,041 

6,245 

45,262,625 

47,528,720 

1909.. 

. 7,600 

6,218 

41,342,327 

21,560,790 

1910.. 

.  4,860 

6,349 

37,942,930 

35,020,872 

1911.. 

. 4,277 

4,202 

27,999,934 

71,410,194 

1912. . 

. 4,072 

5,172 

30,088,484 

8,488,053 

During  this  period  there  has  also  been  a  steady  decline  in  Real  Estate  activity  in 
the  Borough  of  Brooklyn,  as  shown  by  the  following  figures  from  the  Record 


and  Guide ; 

NUMBER  OF  NUMBER  OF  AGGREGATE  AMOUNT 
YEAR.  CONVEYANCES.  MORTGAGES.  OF  MORTGAGES 

1906  .  46,218  39,420  $162,574,512 

1907  .  32,251  32,756  138,889,521 

1908  .  26,455  24,901  88,650,608 

1909.... .  27,274  26,398  104,706,117 

1910  .  26,605  24,399  106,453,775 

1911  .  25,111  21,915  95,527,909 

1912  .  24,349  19,216  79,063,269 


Does  this  steady  decline  indicate  that  “assessments  must  follow  the  evi¬ 
dence  of  value,  cannot  precede  it?” 

While  we  are  told  that  the  increase  “cannot  precede”  the  “evidence  of 
value,”  yet,  with  a  declining  market,  as  appears  from  the  above  tables,  the 
Department  of  Taxes  and  Assessments  has  annually  given  us  the  following 
increases: 


—ALL  THE  BOROUGHS— 


LAND. 

BUILDINGS. 

TOTAL 

YEAR. 

TOTAL  INCREASE. 

TOTAL  INCREASE. 

LAND  &  BUILDINGS 

1906 . 

$439,428,219 

1907 . 

. .  $196,059,478 

$181,537,064 

$377,596,542 

1908 . 

284,271,643 

153,218,824 

437,490,467 

1909 . 

42,561,710 

73,290,550 

115,852,260 

1910 . 

115,402,444 

118,581,176 

233,983,620 

1911 . 

554,795,626 

165,194,144 

719,989,770 

1912 . 

7,432,238 

60,821,644 

68,253,882 

Total  . 

...  $1,200,523,139 

$752, 643,402 

$1,953,166,541 

Total  assessed  value  of  land  and  buildings,  all  the  Borough,  1912 . $7,279,579,651 

Total  assessed  value  of  land  and  buildings,  all  the  Borough,  1912....  5,326,413,110 


Increase,  1906  to  1912 


16 


$1,953,166,541 


Increase  in  Assessment  of  Ordinary  Real  Estate 
in  each  of  the  Boroughs  for  1911 


INCREASE  IN  INCREASE  IN 


TOTAL  INCREASE 


BOROUGH. 

Manhattan 
Brooklyn 
Bronx  . . . 
Queens  ... 
Richmond 


LAND. 

$209,611,518 
.  197,997,868 
..  64,905,070 
.  75,908,855 
.  6,372,314 


BUILDINGS. 

$  32,148,057 
71,410,194 
33,372,894 
23,498,692 
4,764,308 


LAND  AND  BUILDINGS. 

$241,759,575 

269,408,062 

98,277,964 

99.407,547 

11,136,622 


Total  . $554,795,625  $165,194,145 


$719,989,770 


MONTHLY  BULLETIN 
Published  by 
BOARD  OF  BROKERS 
OF  THE  CITY  OF  NEW  YORK,  (Inc.) 

Jan.,  1912 — Page  17. 

FOOD  FOR  THOUGHT. 

326-330  Broadway  (Tefft-Weller  Property) 

Sold  December  29,  1911,  for  $500,000. 

It  was  appraised  in  1901  at  $1,200,000. 

Tax  Department  assessment  is  $725,000. 

In  April,  1911,  it  was  bid  in  at  auction  for  $570,000. 

The  entire  tax  list  should  go  back  to  the  1910  assessment  values  to 
give  New  York  City  real  estate  a  fair  deal. 


In  the  face  of  the  numerous  facts  to  the  contrary,  many  that  are  a  matter  of 
public  record,  the  Tax  Commissioners  would  have  the  taxpayers  believe  that  in 
1910,  facts  were  in  existence  that  the  Tax  Commissioners  discovered,  yet  have  never 
produced,  which  would  fully  justify  the  retaining  and  the  increase  in  the  assessed 
valuation  of  real  estate  as  a  whole,  for  the  year  1911,  to  the  extent  of  $719,989,770.00. 
How  is  such  an  increase  justified  when  the  City  Charter  requires  that  assessments 
be  based  upon  “what  real  estate  would  sell  under  ordinary  circumstances?” 

The  Borough  of  Brooklyn’s  share  was  an  increase  for  1911  in  land  value  $197,- 
997,868  (over  33  per  cent,  increase)  on  the  1910  assessment,  and  an  increase  in  the 
>  assessed  value  of  buildings  of  $71,410,194,  (over  10  per  cent,  increase)  on  the 
1910  building  assessment.  Total  increase  in  assessed  value  of  land  and  building 
was  $269,408,062,  or  about  21  per  cent,  increase  on  the  total  assessed  valuation  for 
1910  in  the  Borough  of  Brooklyn. 


17 


Notorious  excessive  valuations  of  real  estate  for  the  purposes  of  taxa¬ 
tion,  with  an  excellent  prospect  of  further  increase  and  no  relief  for  inequitable 
or  excessive  assessments  in  sight,  complaints  ignored,  protests  having  been 
found  vain — these  conditions  have  had  a  tendency  to  retard  the  value  of  real 
estate,  to  decrease  its  marketability,  and  to  make  it  less  desirable  as  an  invest¬ 
ment. 

In  fact,  the  present  condition  of  the  real  estate  market  can  be  properly  and 
directly  attributed  to  our  present  Tax  System  and  Methods  more  than  to  any 
other  cause. 

Deputy  Tax  Commissioners,  who  place  the  tentative  assessed  valuations  on  real 
estate  for  purposes  of  taxation,  cannot  be  held  responsible  for  the  existence  of 
these  conditions,  for  they  are  powerless  to  remedy  them. 

The  Deputies  are  civil  service  appointees  and  solely  under  the  instructions  and 
supervision  of  the  Board  of  Taxes  and  Assessments,  and  furthermore,  the  Tax 
Commissioners,  as  a  Board  of  Taxes  and  Assessments  have  ample  power  to  correct 
any  assessment,  which  in  the  opinion  of  the  Board  is  erroneous,  regardless  of  any 
opinion  to  the  contrary  by  the  deputies. 

Were  the  Tax  Commissioners  to  give  the  same  careful  supervision  that 
they  give  to  reductions — require  the  same  character  of  positive  evidence  as  to 
the  actual  value  before  assessments  on  real  estate  are  increased;  then  pay  as 
little  attention  to  the  facts  as  they  do  when  reductions  are  requested — there 
would  never  be  any  occasion  for  taxpayers  to  complain  in  regard  to  excessive 
valuations  on  ordinary  real  estate  for  purposes  of  taxation. 

What  amount  o.f  increase  in  the  assessed  valuations  of  ordinary  real  estate  will 
the  books  show  on  October  1,  1913,  for  the  year  1914? 

Prior  to  October  1,  1913,  under  the  present  rules  of  the  Department  of 
Taxes  and  Assessments,  no  information  can  be  obtained  in  regard  to  any  as¬ 
sessment  on  real  estate  for  1914.  April  1st  to  October  1st,  the  Deputy  Tax 
Commissioners  place  the  tentative  assessed  valuations  on  ordinary  real  estate 
for  1914. 

Will  real  estate  owners  receive  another  1911  boost  of  $900,000,000  in  their  real 
estate  valuations?  On  the  same  theory  of  equalization  and  depression  of  1907  and 
1908,  small  increases  in  assessed  values  for  the  two  previous  years.  (In  1911  it 
was  1909  and  1910.)  (In  1914  will  it  be  1912  and  1913?)  Conditions  are  very  sim¬ 
ilar.  The  necessity  for  more  money  and  an  increased  borrowing  capacity  still  exists. 

The  1911  increase  was  saddled  on  real  estate  owners  without  any  previous 
notice  or  warning. 

The  same  Tax  Departmental  System  and  Methods  used  to  increase  the 
1911  assessed  valuations  also  to  retain  the  increase,  and  the  same  facts  made 
use  of  by  the  Tax  Commissioners  to  justify  the  increase  of  1911  in  their 
yearly  report  to  the  Mayor,  might  just  as  easily  and  readily  be  used  in  jus¬ 
tification  of  a  similar  or  even  larger  increase  in  1914  valuation  of  ordinary 
real  estate  for  purposes  of  taxation. 

Should  the  Tax  Commissioners  see  fit  to  use  the  additional  fact  of  signing  of 
subway  contract,  there  is  no  telling  where  the  increases  may  end. 

Any  further  increase  at  this  time  would  sound  the  death  knell  to  real  estate 
values. 


18 


Discrimination  Against  Real  Estate 

In  the  Department  of  Taxes  and  Assessments  Annual  Report  for  1912  on 
Page  13,  this  Statement  appears: 

“96  per  cent,  of  the  total  assessments  of  property  upon  the 
rolls  for  1912  is  real  estate — 4  per  cent,  is  personalty.” 

THE  ENORMOUS  EXTENT  TO  WHICH  REAL  ESTATE  OWNERS 
CONTRIBUTE  TO  THE  CITY’S  EXPENDITURE  SHOULD  AT 
LEAST  ENTITLE  EVERY  OWNER  TO  RECEIVE  HONEST  TREAT¬ 
MENT  AND  SIMPLE  JUSTICE  AT  THE  HANDS  OF  THOSE  TO 
WHOM  THE  ENFORCEMENT  OF  LAW  AND  POWERS  OF  GOVERN¬ 
MENT  HAS  BEEN  ENTRUSTED. 

*  Aitnough  the  Assessment  Rolls  do  not  indicate  all  the  City’s  sources  of  revenue, 

they  serve  to  show  the  extreme  need  of  efficiency  and  proper  methods,  especially  in 
appraising  real  estate  for  the  purpose  of  taxation. 

The  City  Charter  very  clearly  states  that,  “Real  Estate  assessed  valuations  for 
purposes  of  taxation  shall  be  for  the  sum  which  real  estate  would  sell  under 
oruinary  circumstances.” 

This  is  the  only  legal  basis  which  may  be  used  for  placing  assessed  valuations 
on  ordinary  real  estate  by  the  Department  of  Taxes  and  Assessments. 

Equitable  assessments  of  real  estate  are  the  only  methods  by  which  each  tax¬ 
payer  may  be  charged  with  a  just  portion  of  taxes,  and  such  methods  tend  to  in¬ 
spire  confidence  in  real  estate  as  a  safe  and  sound  investment — equitable  assess¬ 
ments  are  the  best  asset  any  city  can  possess. 

Governor  Sulzer,  Mayor  Gaynor,  President  Lawson  Purdy  of  the  Department  of 
Taxes  and  Assessments  and  Tax  Commissioner  Judson  Wall  of  the  Borough  of 
Brooklyn,  have  all  publicly  admitted  the  inequitable  and  over-assessment  of  real 
estate  valuations  for  purposes  of  taxation  in  the  City  of  New  York. 

Governor  Sulzer’s  statement  at  the  dinner  of  Allied  Real  Estate  Interests,  Fri¬ 
day,  February  28,  1913,  was  as  follows:  “To-day  most  of  the  real  estate  (in  the 
city)  is  not  worth  what  it  is  assessed  at.” 


Star  Chamber  and  Tyrannical  Methods 

The  Present  Tax  Departmental  System  is  a  mystery  to  the  average  real 
estate  owner.  The  present  system  now  in  use  has  been  so  devised  and  re¬ 
vised  that  it  can  stand  anything  but  publicity.  It  thrives  on  the  ignorance 
of  the  public,  more  especially  on  the  part  of  the  real  estate  owner. 

1909  Annual  Report,  Department  of  Taxes,  Page  19. 

“Assessments  are  more  and  more  regarded  as  reliable  indications 
of  the  conservative  market  value  of  Real  Estate.  The  methods  of  the 
Tax  Department  are  good  and  the  more  they  are  understood  the 

*  more  will  assessments  be  regarded  as  good  evidences  of  value.” 

Governor  Sulzer’s  remark,  “To-day  most  of  the  real  estate  is  not  worth  what 
it  is  assessed  at”  is  a  most  pertinent  commentary  upon  this  statement.  It  needs 

*  neither  qualification  nor  amplification. 

1909  Annual  Report,  Department  of  Taxes,  Page  17. 

“Any  consideration  of  the  assessed  value  of  ordinary  real  estate 
must  take  into  account  the  fact  that  the  assessment  is  based  on  the 


19 


evidence  of  value  given  by  sales,  rentals,  etc.,  during  the  preceding 
fifteen  months.  Assessments  must  follow  the  evidence  of  value  and 
cannot  precede  it.” 

Considering  this  statement  of  the  Tax  Commissioners  to  be  a  fact;  there 
was  certainly  no  increase  in  the  valuation  of  ordinary  real  estate  as  a  whole, 
nor  were  there  in  existence  any  other  facts  during  the  years  of  1909  and 
1910,  or  even  prior  to  the  opening  of  the  books  for  public  inspection  of  the 
assessed  valuations  placed  on  real  estate  for  1911,  which  would  warrant  or 
could  justify  any  such  increase  either  in  theory  or  fact,  as  was  placed  on 
real  estate  for  purposes  of  taxation  for  1911  by  the  deputy  tax  commissioners, 
amounting  to  $897,048,683,  or  the  reduced  amount  of  $719,989,770,  as  was 
finally  approved  by  the  Tax  Commissioners. 

The  assessment  rolls  and  the  records  of  the  department  will  confirm  the 
truth  of  a  statement  credited  to  President  Purdy  in  the  Manhattan  Lectures, 
published  1911  by  the  West  Side  Y.  M.  C.  A. 

“There  is  a  notion  quite  commonly  entertained  and  absolutely 
erroneous,  that  a  board  to  hear  complaints  can  be  so  constituted  that  it 
can  secure  a  fair  assessment. 

“No  board  for  the  correction  or  review  of  assessments  has  ever 
existed  that  can  do  very  much  to  correct  a  poor  assessment.  In  the 
City  of  New  York  there  are  over  480,000  separately  assessed  parcels  of 
real  estate.  The  greatest  number  of  applications  for  correction  since 
the  consolidation  of  the  city  has  been  about  10,000,  or  only  a  little  over 
two  per  cent,  of  the  whole  number.  With  so  large  a  number  of  applica¬ 
tions  as  10,000,  it  is  almost  physically  impossible  to  give  each  application 
the  attention  it  deserves,  and  this  statement  is  made  with  full  knowl¬ 
edge  of  the  fact  that  not  more  than  one  application  in  five  has  any 
merit.  If  all  the  10,000  had  merit  and  all  could  be  acted  upon  with 
sufficient  time  and  intelligence,  there  would  then  be  corrections  as  to 
only  two  per  cent,  of  the  total  number  of  assessments.  In  spite 
of  the  fact  that  a  Board  of  Review  has  very  little  value  as  a  means 
of  correcting  a  poor  assessment,  it  may  have  very  great  value  indeed 
in  performing  the  most  important  function  of  securing  a  beirer  assess¬ 
ment  the  following  year  if  the  Board  of  Review  is  composed  of  the 
same  men  who  direct  the  work  of  the  assessors.” 

Dept,  of  Taxes  and  Assessments’  annual  reports  for  1911  show  20,216  written 
applications  for  reductions  were  filed  during  1911 — about  twice  as  many  as 
were  quoted  by  President  Purdy  as  the  greatest  number  filed  in  the  City.  Ten 
per  cent,  more  than  what  were  quoted  as  the  greatest  number  ever  filed  in  the 
City,  were  filed  in  Brooklyn  alone  in  1911,  there  being  11,800  written  applications 
for  reduction. 

According  to  President  Purdy,  it  was  physically  impossible  to  give  proper 
attention  to  these  protests.  If  no  board  can  do  “very  much”  with  a  poor  assessment 
what  hope  was  there  for  the  11,000  protesting  property  owners  in  Brooklyn? 

When  a  written  protest  has  been  filed  for  the  correction  of  an  excessive  as¬ 
sessment  on  real  estate  and  the  Board  of  Taxes  and  Assessments  has  refused  to 
grant  the  reduction  requested,  an  action  at  law,  known  as  Certiorari  Proceedings, 
may  be  commenced  in  the  Supreme  Court  within  a  stated  time  to  review  and 
correct  any  final  determination  of  the  Board. 


20 


Certiorari  Proceedings  are  about  the  only  means  apparent  by  which  the 
Board  of  Taxes  and  Assessments  can  be  compelled  to  correct  any  erroneous  ex¬ 
cessive  assessments. 

In  the  Department  of  Taxes  and  Assessments  annual  report,  1908,  on  Page  93, 
there  appears  as  follows : 

Certiorari — Right  of  Taxpayers  to  Review  is  Absolute 
and  not  a  Matter  of  Discretion 

The  right  of  a  taxpayer  to  review  an  assessment  by  Certiorari 
is  absolute  and  not  a  matter  of  discretion,  and  may  show  that 
the  assessment  is  invalid  for  any  reason. 

— People  ex.  rel.  Friendly  vs.  Davenport,  119  App.  Div.  790. 

Should  a  taxpayer  bring  a  certiorari  proceeding  and  be  successful,  only  the 
assessed  value  of  the  property  in  question  is  corrected.  All  similar  properties 
may  retain  excessive  values,  regardless  of  the  number. 

Certiorari  Proceedings  are  a  luxury  the  ordinary  real  estate  owner  cannot 
afford,  on  account  of  the  expense  for  legal  services,  expert  testimony,  etc. 

The  Board  of  Taxes  and  Assessments  has  devised  an  effective  plan  to 
discourage  the  correction  of  even  a  single  parcel  by  any  such  means. 

On  November  11,  1909,  at  the  Bedford  Branch  of  the  Y.  M.  C.  A.,  in  Brooklyn, 
President  Lawson  Purdy,  of  the  Department  of  Taxes  and  Assessments,  de¬ 
livered  a  lecture  on  “Assessments  and  Taxation”  before  a  real  estate  class. 
During  the  course  of  his  remarks,  he  said,  referrring  to  certiorari  proceedings : 

“If  you  own  or  represent  a  good  deal  of  property,  I  will  give  you 
a  little  advice.  Be  very  slow  about  getting  into  litigation  with  the 
Tax  Department;  it  is  Bad  Business.  This  is  what  happens  when 
there  is  litigation.  We  make  an  assessment  and  you  make  application 
to  correct  it.  Perhaps  we  are  wrong  and  you  are  grieved.  You  take 
out  a  writ  to  reduce  the  assessment.  The  next  year  we  do  not  enter 
that,  as  that  would  be  a  confession  that  we  were  wrong  the  year  before. 

You  may  then  have  to  get  a  writ  the  next  year  and  the  year  after,  and 
no  one  knows  where  it  will  end.” 

This  statement  was  made  during  my  presence  and  a  copy  cf  the  entire  lecture 
containing  this  statement  is  in  my  possession. 

The  question  might  well  be  asked:  What  kind  of  treatment  is  granted  the 
small  taxpayer  who  protects  against  an  excessive  valuation,  and  cannot  afford  the 
expense  of  a  real  estate  appraiser  or  litigation,  in  order  to  secure  a  reduction, 
if  such  elaborate  precautions  must  be  taken  to  avoid  the  appearance  of  error? 

Certiorari  Proceedings  are  not  only  expensive  to  the  taxpayer  but  to  the  City 
also  in  defending  erroneous  assessments. 

For  instance,  expert  real  estate  appraisers  who  testify  for  the  city  are 
men  outside  of  the  Department,  and  never  the  men  employed  in  the  De¬ 
partment  who  place  the  disputed  assessment  on  the  property. 

The  main  qualification  required  of  the  experts  employed  by  the  city  are 
that  they  shall  sustain  the  departmental  valuations  on  real  esate.  All  ex¬ 
penses  entailed  by  the  City  in  such  litigation,  eventually  are  a  charge  on  all 
taxpayers,  as  they  swell  the  budget  and  raise  the  tax  rate. 

The  Departmental  records  furnish  conclusive  evidence  of  how  effective  this 
method  is,  in  discouraging  litigation  with  the  City. 


21 


None  of  these  deplorable  conditions  or  facts  is  due  to  the  tax  laws;  it  is 
purely  and  simply  a  matter  of  Tax  Departmental  System  (which,  according 
to  the  Commissioners,  is  more  important  than  the  law),  and  of  methods  which 
are  arbitrary,  impractical  and  fallacious. 

Among  the  12,000  1912  applications  for  reduction,  about  6,500  written  protests 
on  over-valuations  were  filed  in  Brooklyn;  about  1,700  were  given  a  hearing,  and 
after  only  a  cursory  examination  reductions  amounting  to  about  $25,000,000  were 
made,  effecting  27,000  parcels  of  real  estate,  or  only  about  15  per  cent,  of  the 
total  number  of  separately  assessed  parcels  of  real  estate  on  the  Brooklyn  tax 
rolls.  (There  are  over  200,000  parcels  in  Brooklyn).  About  85  per  cent, 
retain  their  excessive  valuations  of  1911.  The  increase  in  the  previous  year, 

1911,  was  $269,408,062. 

Mayor  Gaynor  stated  in  November,  1911,  “that  this  increase  was  excessive  to  i 
the  extent  of  $200,000,000.” 

A  proper  correction  of  Brooklyn  ordinary  real  estate  assessed  values  at 
present  would  disclose  that  at  least  $150,000,000  of  excessive  valuations  has 
existed  since  the  1911  assessments.  This,  in  plain  words,  means  that  a  large 
number  of  Brooklyn  property  owners  are  compelled  on  account  of  excessive 
assessed  values  of  real  estate  to  pay  taxes  on  an  amount  of  real  estate  WHICH 
THEY  NEVER  OWNED,  and  in  taxes  were  over-charged  more  than  $2,500,- 
0CG  during  each  year,  1911,  1912  and  1913,  with  apparently  no  redress  or  any 
chance  of  ever  obtaining  any.  For  a  majority  of  them,  the  cost  of  securing 
correct  assessed  valuations  would  far  exceed  the  saving  in  taxes.  On  this 
basis,  in  order  to  increase  the  borrowing  capacity  of  the  City,  the  excess 
cost  to  Brooklyn  real  estate  owners  alone,  will  be  over  $7,500,000  for  the 
years  1911,  1912  and  1913. 

THIS  IS  ONLY  BROOKLYN’S  SHARE. 

THERE  ARE  FOUR  OTHER  BOROUGHS. 

Deputy  Tax  Commissioners  and  others  in  the  employ  of  the  City,  who  place 
the  tentative  valuations  on  ordinary  real  estate  for  purposes  of  taxation,  perform 
all  such  duties  solely  under  the  direction  and  supervision  of  the  Board  of  Taxes 
and  Assessments. 

The  Department  of  Taxes  and  Assessments,  the  head  of  which  is  called  “The 
Board  of  Taxes  and  Assessments,”  consists  of  a  President,  designated  in  his 
appointment,  and  six  tax  commissioners. 

Appointments  of  President  and  the  six  commissioners  are  made  by  the  Mayor, 
and  all,  or  any  of  them,  are  removable  at  the  pleasure  of  the  Mayor. 

Ample  power  is  given  the  Tax  Commissioners  under  the  charter  and  the 
tax  laws  to  insure  equitable,  fair  and  just  assessments  of  real  estate  on  the  City 
Charter  basis,  for  the  sum  real  estate  would  sell  under  ordinary  circumstances. 

They  have  also  most  extraordinary  discretionary  powers. 

The  Departmental  System  of  appraising  is  termed  by  the  Tax  Commissioners 
as  wholesale  appraising.  When  any  correction  is  made ,  it  necessitates  wholesale 
correction  as  well  to  insure  equality. 

The  increase  in  the  Borough  of  Brooklyn  for  1911,  as  approved  by  the  Tax 
Commissioners  after  written  protests  were  filed  and  so-called  hearing  was  held,  was 
$269,408,062. 

The  books  and  records  of  the  Department  of  Taxes  and  Assessments  for 
1911  in  the  Brooklyn  office  will  prove  conclusively  that  the  enormous  increase 
in  the  assessed  valuations  of  1911  in  Brooklyn  were  based  upon  mere  con¬ 
jecture  or  surmise  as  to  the  value. 


22 


The  records  will  also  disclose  the  facts,  that  the  Tax  Commissioners  assigned 
the  Deputy  Tax  Commissioners  to  districts  for  1911,  that  they  had  little  or  no 
previous  experience  or  knowledge  of,  in  regard  to  the  real  estate  valuations  or 
conditions. 

In  Brooklyn  for  the  year  1912,  on  account  of  a  change  in  the  Tax  Laws, 
there  were  only  about  three  months  to  correct  the  1911  over-valuations  and  under¬ 
valuations  and  also  place  correct  valuations  for  1912.  Many  of  the  deputies 
were  assigned  to  new  districts. 

With  three  months  less  to  do  this  work,  and  not  having  had  even  the  benefit 
*  of  the  experience  in  placing  the  original  assessments,  about  all  the  deputies 
could  do  was  to  copy  the  1911  assessment  for  the  1912  assessment. 

RESULT — $27,252,673  tentative  increase  in  1912,  mostly  new  building  assets, 
i  In  a  few  of  the  districts  the  land  was  decreased,  but  still  the  total  increase  on 
land  was  $2,855,997. 

A  vigorous  campaign  for  reductions  of  the  1912  assessments  was  conducted  by 
the  press  in  Brooklyn,  especially  in  the  Brooklyn  Sunday  edition  of  the  New  York 
American  and  the  Brooklyn  Daily  Eagle: 

The  Tax  Commissioners  probably  realized  that  the  public  sentiment  had  to 
be  considered,  as  for  the  first  and  only  time  real  public  hearing  on  protests  was 
held  and  the  result  was  almost  disastrous  to  the  tax  system  (in  1913,  as  formerly, 
Star  Chamber  proceedings  were  held).  Brooklyn  received  probably  the  smallest 
increase  in  the  history  of  any  of  the  boroughs.  The  $27,252,673  increase  in  the 
1912  assessed  valuation  by  the  Deputy  Tax  Commissioners  was  reduced  by 
the  Tax  Commissioners  to  $498,956  in  Brooklyn. 


The  1913  Brooklyn  assessments  of  ordinary  real  estate  furnish  another  prac¬ 
tical  demonstration  of  the  absolute  control  the  Tax  Commissioners  exercise  over 
the  deputy  tax  commissioners’  figures. 

The  Brooklyn  Eagle ,  March  2,  1913,  in  an  article  referring  to  the  1913  assess¬ 
ments  of  ordinary  real  estate  as  approved  by  the  Tax  Commissioners. 

It  is  stated  that  the  tentative  increase  by  the  Deputy  Tax  Commis¬ 
sioners  in  Brooklyn  was  $24,000,000  in  the  assessed  value  of  real' estate 
due  to  improvements. 


This  would  mean  that  the  deputies  practically  copied  the  1912  figures  for  1913, 
plus  the  amount  of  new  buildings,  being  the  same  method  used  for  the  1912 
assessments,  copying  the  1911  assessments. 

The  tax  commissioners  reduced  this  increase  so  that  the  amount  remaining 
for  1913  is  $2,813,093.  The  tax  commissioners  reduced  the  land  value  as  placed 
by  the  deputies  for  1913,  about  $21,000,000.  There  still  remains  about  $170,000,- 
000  of  the  increase  on  Brooklyn  land  as  approved  by  the  tax  commissioners 
for  1911  upon  which  owners  pay  taxes. 

*  New  buildings  erected,  which  were  added  by  the  deputies  to  the  1912  and  1913 

assessments,  amounted  in  1912  to  over  $17,500,000;  in  1913  about  $24,000,000. 

This  new  asset  to  Brooklyn  in  the  way  of  new  buildings,  amounting  to  about 
>  $41,500,000,  according  to  the  Tax  Commissioners,  this  new  asset  has  had  a  most 

remarkable  effect :  that  of  decreasing  the  land  value  in  Brooklyn  about  $29,000,000, 
and  only  increased  the  assessed  value  for  1912,  $498,956  and  for  1913,  $2,813,093, 
making  a  total  for  1912  and  1913  of  an  increase  of  $3,312,049,  with  new  assets 
of  $41,500,000. 


23 


Taxpayers  seeking  a  reduction  of  an  erroneous,  excessive  assessment  on  real 
estate  invariably  are  compelled  to  file  a  written  protest,  and  are  handed  a  De¬ 
partment  Blank  for  that  purpose,  on  which  is  plainly  printed:  “To  secure  proper 
attention,  this  form  must  be  used  and  the  questions  clearly  answered.” 

Some  of  the  questions  are  such  as  the  average  real  estate  owner  is  unable 
to  answer,  and  he  must  seek  outside  aid. 

Unless  written  request  for  a  hearing  is  made  on  the  blank,  no  hearing  will 
be  granted  before  the  tax  commissioners  as  a  Board  for  the  correction  and  review 
of  assessments. 

There  is  nothing  on  the  blanks  to  indicate  such  a  written  request  is  necessary 
in  order  to  be  entitled  to  a  hearing  before  the  Board  of  Revision.  Even  when 
such  written  request  is  made,  only  a  small  percentage  are  granted  hearing  by  the 
Tax  Commissioners.  The  Tax  Commissioners  frankly  state  that  such  hearings, 
when  granted,  are  to  be  considered  as  an  act  of  courtesy  only.  These  so-called 
hearings  are  practically  “Star  Chamber  Proceedings.” 

Written  protests  presented  in  the  Brooklyn  Office  for  filing  have  been  refused, 
unless  facts  stated  were  in  affidavit  form  and  sworn  to. 

In  order  to  answer  the  Tax  Commissioners  satisfactorily  the  technical  ques¬ 
tions  asked  at  the  hearings  regarding  valuations,  etc.,  it  would  necessitate  the; 
employing  of  a  real  estate  appraiser  or  an  attorney-at-law — more  frequently  both. 

After  these  forms  of  filing  protests  are  duly  performed  and  the  courtesy  of  a 
hearing  is  granted,  then,  as  a  matter  of  fact,  the  taxpayer,  as  has  been  explained, 
has  slight  chance  of  securing  any  reduction. 

One  of  the  Tax  Department  officials  in  the  Brooklyn  office  was  interviewed 
in  my  presence  in  the  latter  part  of  1911  by  an  editor  of  a  certain  news¬ 
paper  and  was  asked  by  him  “If  he  would  state  what  facts,  in  the  opinion  of 
the  Deputy  and  the  Tax  Department,  could  possibly  justify  a  certain  increase 
in  1911  that  was  made,  amounting  to  over  100  per  cent.,  especially  in  view  of 
the  fact  the  books  showed  that  the  Tax  Commissioners  had  the  previous  year 
(1910)  reduced  much  lower  figures  made  by  the  same  Deputy  on  the  same 
property?”  His  answer  was:  “That  the  increase  was  made  OPENLY, 
MALICIOUSLY  AND  DEFIANTLY,”  (the  facts  regarding  the  increase 
confirm  the  statement).  After  a  pause,  he  added:  “What  are  you  going  to 
do  about  it?” 

After  Mayor  Gaynor’s  speech,  at  the  Fifth  Avenue  Association  dinner  on 
Nov.  21,  1911,  the  tax  officials  in  the  Brooklyn  office  became  a  little  more  diplo¬ 
matic,  for  instance — Tax  Commissioner  Wall. 

Tax  Commissioner  Judson  Wall,  of  Brooklyn,  makes  use  of  a  stereotyped 
answer  to  ward  off  all  pertinent  specific  questions  in  regard  to  excessive 
valuations  or  about  the  tax  department  system.  It  is,  “that  the  questions 
are  asked  to  embarras  the  department  and  I  refuse  to  answer  them.”  If 
pressed  further  for  an  answer,  Tax  Commissioner  Wall  will  refuse  to  be 
interviewed,  and  any  further  or  future  audiences  on  the  subject  will  be 
positively  denied. 

Sometimes  a  suggestion  is  made  by  Commissioner  Wall,  or  his  chief 
clerk,  “better  see  President  Purdy.”  President  Purdy’s  answers  are  still  more 
diplomatic,  but  results  are  the  same.  No  information  that  will  tend  to  em- 
barass  the  department  can  be  obtained — neither  will  a  correction  of  an  er¬ 
roneous  assessment  be  made  which  will  enable  any  one  to  point  a  finger  at 
the  department  and  say,  “There’s  an  error  that  was  acknowledged.” 


24 


Editorial  Comments 


Brooklyn  Daily  Eagle ,  January  9,  1911. 

THREE  HUNDRED  MILLIONS. 

“Now  comes  22  per  cent.  more.  That  is  doing  things  by  wholesale.  That  is 
«  worse  and  more  of  it.  There  has  been  no  boom.  On  the  contrary,  Brooklyn 
real  estate  has  been  and  is  a  drug  in  the  market.” 

“The  assessors  have  obeyed  instructions.  They  have  done  what  they  were  told  . 
to  do.  And  they  have  done  it  thoroughly.  In  hundreds,  not  to  say  thousands,  of 
cases  they  have  added  to  burdens  already  almost  too  heavy  to  be  borne.” 


WHY  NOT  BE  HONEST  WITH  THE  PEOPLE? 

Brooklyn  Daily  Eagle ,  January  10,  1911. 

“When  the  people  put  a  government  in  power  they  expect  to  be  fairly  treated 
by  the  officials  they  create.  The  people  of  Brooklyn  have  not  been  fairly  treated 
by  the  tax  officials  of  this  administration.  They  have  a  cause  for  profound  and 
bitter  complaint  in  the  raising  of  assessments  beyond  the  values  at  which  much 
of  the  property  assessed  could  be  sold,  even  if  the  market  for  Brooklyn  real 
estate  were  active,  which  is  not  the  case.” 

“If  a  certain  amount  of  additional  revenue  be  required  for  the  mainten¬ 
ance  of  the  city  government  and  the  execution  of  public  improvements,  why 
not  take  an  obviously  honest  method  to  obtain  it.  Why  push  up  assessments 
beyond  the  values  at  which  Brooklyn  owners  would  be  willing  to  dispose 
of  their  holdings;  if  buyers  could  be  fortunately  found?  Why  not  assess 
on  the  basis  of  real,  and  not  on  assumed  values  and  then  raise  the  tax  rate 
to  meet  the  demand  for  increased  revenue? 

“The  method  adopted  by  the  Board  of  Assessors  is  nothing  less  than 
robbery  perpetrated  to  a  large  extent  at  the  expense  of  people  who  cannot 
readily  meet  the  extortion.  Of  these  people  the  Sun  says  this  morning: 
‘In  their  household  budgets,  taxes  and  carfare  are  important  items.  Yet 
they  are  now  taxed  more  heavily  than  ever  before  on  values  which  for  the 
most  part  virtually  represent  expected  salaries  or  other  future  incomes/ 

“This  puts  the  case  in  a  nutshell.  The  new  assessment  is  an  attempt  to 
capitalize  the  future  rather  than  an  honest  effort  to  arrive  at  true  values  as 
they  now  exist.  The  wrong  of  this  is  apparent.  It  is  a  wrong  for  which 
the  people  of  Brooklyn  will  insist  upon  redress.” 


i  CAUSE  AND  EFFECT. 

Brooklyn  Daily  Eagle,  January  10,  1911. 

>  “Assess  at  full  value.”  Nothing  could  have  been  shorter  or  sharper  or  more 

decisive.  And,  of  course,  it  bore  fruit  after  the  manner  of  its  kind.  This  for 
the  best  of  reasons. 

“The  assessors  knew  not  only  what  was  expected,  but  what  to  expect.  Self- 
preservation.  being  the  law  of  official  nature,  they  obeyed  orders.  There  was 
multiplication  all  along  the  line. 


25 


“There  is  such  a  thing  as  confiscation  ‘in  the  name  of  the  law.’  A  fair  share 
of  the  cost  of  government  none  should  object  to  paying,  but  assessments  based 
upon  fantastic  figures  are  different. 

“With  a  higher  rate,  based  upon  the  actual,  none  would  find  fault.  A  lower 
rate,  based  upon  the  inflated,  is  a  humbug.” 

TAX  VALUATION. 

Brooklyn  Union ,  February  14,  1912. 

“The  amount  of  taxes  is  fixed  by  the  appropriation,  including  the  appropriations 
that  have  to  be  made  for  debt  service;  but  whether  the  rate  shall  go  up  or  the 
valuations  shall  go  up  depends  upon  whether  an  extended  borrowing  capacity 
happens  to  be  wanted.” 


THIS  YEAR  IT  IS  THE  TAX  RATE. 

Brooklyn  Standard  Union,  March  2,  1912. 

“They  get  you  one  way  or  the  other.  The  City’s  expenses  have  got  to  be  paid 
by  the  taxpayers ;  if  the  payment  is  put  off  by  borrowing,  it  simply  increases  the 
amount  to  be  paid,  for  of  the  $181,000,000  budget  this  year,  $35,000,000,  by  far  the 
largest  single  item,  is  to  meet  interest  on  the  city  debt.  When  for  some  reason 
or  other  they  want  the  borrowing  capacity  to  be  vastly  increased  they  made  it  so 
and  put  down  the  rate;  when  they  prefer  to  have  the  borrowing  capacity  only 
slightly  increased,  they  put  up  the  rate.  About  the  only  difference  is  that  if  your 
valuation  is  marked  up  you  can  bring  pressure  to  bear  and  may  have  your  in¬ 
dividual  assessment  reduced;  but  when  they  put  up  the  rate,  that  rate  stands 
for  everybody.” 

Brooklyn  Citizen,  March  2,  1912. 

“To  those  whose  1912  tax  bills  will  be  higher,  this  explanation,  we  know,  will 
be  cold  comfort.  They  will  feel  somewhat  like  the  man  who  got  it  going  and 
coming.  When  the  tax  rate  is,  comparatively  speaking,  low,  the  assessments  are 
abnormally  high.  When  the  assessments  are  fairly  normal  the  tax  rate  jumps  up.” 


VALUES— REALTY  AND  REAL 

The  Evening  World,  September  30,  1912. 

“The  Tax  Department  seems  to  have  adopted  the  policy  of  the  wily  Oriental, 
who  always  states  a  figure  so  high  that  it  can  stand  a  lot  of  beating  down  and 
still  show  profit.” 


VALUES  AND  TAXES. 

The  Brooklyn  Times,  March  4,  1913. 

“An  unprecedented  real  estate  situation  is  revealed  by  the  latest  report  of  the 
Department  of  Taxes.  The  report  states  that  the  official  valuations  of  land  for 
taxation  are  now  equal  to  the  actual  cash  value  of  the  properties.  As  a  matter 


26 


of  fact,  complete  figures  would  show  that  the  valuations  are  greater  than  the  real 
values,  because  in  the  departmental  estimate  foreclosure  sales  are  used  in  making 
a  basis  for  the  estimate.  Further,  the  true  values  of  the  real  estate  which  has 
changed  hands  in  the  past  year  cannot  be  ascertained  save  in  a  few  scattered 
instances.” 


EDITORIAL. 

Record  and  Guide ,  March  15,  1913. 

THE  CAUSE  OF  THE  REAL  ESTATE  DEPRESSION  AND  THE  REMEDY. 

‘“No  one  who  watches  closely  the  condition  of  public  opinion  among  New  York 
taxpayers  can  fail  to  be  impressed  by  the  gathering  alteration  in  their  attitude 

*  toward  their  own  troubles.  Until  recently  they  did  not  exhibit  any  very  lively 
and  omnipresent  interest  in  the  effect  which  the  tax  policy  of  the  city  government 
was  having  upon  the  condition  of  the  real  estate  market.  Of  course  they  grumbled 
at  the  increase  of  taxes,  and  their  discontent  was  sufficiently  obvious  and  im¬ 
pressive  to  play  a  certain  part  in  the  last  municipal  campaign.  But  still  they  were 
not  thoroughly  in  earnest. 

“They  did  not  take  the  prevailing  depression  very  seriously.  They  did  not 
attribute  it  chiefly  to  causes  connected  with  the  policy  of  their  city  government. 
They  had  been  familiar  with  periods  of  depression  in  the  past,  and  they  remembered 
that  after  some  years  of  agitation  a  sudden  revival  of  prosperity  supervened 
and  their  grievances  were  swallowed  up  in  the  beneficial  effects  of  enlarged  busi¬ 
ness  activity  and  a  return  of  confidence.  They  have  anticipated  that  the  present 
prevailing  period  of  depression  would  vanish  in  the  same  way  and  that  nothing 
which  they  could  do  as  citizens  and  voters  would  contribute  much  either  to  the 
acceleration  of  the  return  of  prosperity  or  to  its  retardation. 

“Recently,  however,  they  have  begun  to  evince  a  more  serious  and  responsible 
interest  in  the  situation.  General  business  prosperity  has,  in  a  large  measure, 
returned  without  benefiting  real  estate  in  New  York  City.  The  number  of  trans¬ 
fers  recorded  are  smaller  than  they  were  during  the  past  two  dull  years.  The 
amount  of  building  is  on  the  decrease.  Very  little  money  is  being  invested  in  real 
estate.  Speculation  is  at  a  standstill.  The  general  condition  is  worse  than  ever, 
while  at  the  same  time  there  can  be  no  doubt  as  to  the  cause  of  the  depression. 
Real  estate  is  almost  unsalable,  except  in  a  few  favored  locations  or  at  a  sacrifice, 
not  because  the  city  is  not  increasing  in  population  and  business,  not  because  its 
general  prospects  and  situations  are  not  as  flattering  as  they  ever  have  been  in 
the  past,  but  largely  because  of  the  effects  of  past  increases  in  taxation  and  the 
threat  of  future  increases. 

“The  growing  public  understanding  of  the  real  cause  of  the  exciting  depression 
has  increased  the  prevailing  sense  of  responsibility  among  property  owners  as  to 
the  adoption  of  an  active,  protesting  and  remedial  policy.  They  are  beginning 
to  realize  that  conditions  will  not  substantially  improve  until  something  is  done 
to  make  them  improve — until  something  is  done,  that  is,  to  remove  the  threat 

*  which  is  now  hanging  over  the  future  of  real  estate  values  in  New  York  City. 
This  action  must  be  taken  by  the  municipal  authorities  and  fit  must  assume  either 
one  or  both  of  two  forms. 

t  “Either  new  sources  of  revenue  must  be  discovered  and  tapped  that  will  provide 

for  the  increase  in  the  city  budget,  or  else  a  policy  of  the  most  rigid  economy 
must  be  adopted.  In  truth  a  combination  of  these  two  methods  of  meeting  the 
difficulty  will  be  necessary,  and  it  will  not  be  taken  withput  the  exercising  of  active 
pressure  on  the  municipal  authorities  by  the  property  owners  of  New  York.  The 
time  has  come  when  it  is  necessary  for  the  property  owners  to  exercise  their 


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latent  political  power.  Even  in  the  matter  of  votes  a  large  proportion  of  the 
taxpayers  of  the  city  would  be  in  a  position  to  exercise  a  great  deal  of  pressure, 
and  their  indirect  influence,  if  properly  mobilized  and  executed,  should  be  still 
more  powerful. 

“In  this  connection,  however,  property  owners  should  remember  one  important 
fact.  In  New  York  municipal  elections  take  place  only  once  every  four  years 
and  the  possible  political  influence  they  possess  cannot  be  exercised  oftener  than 
that.  An  election  takes  place  next  fall  and  that  election  will  provide  the  taxpayer  with 
the  only  opportunity  to  make  himself  felt  that  he  will  enjoy  for  a  long  time.  y 

It  promises  to  be  a  very  interesting  election,  during  which  questions  of  municipal 
policy  will  receive  an  unusually  fine  and  enlightening  discussion.  It  will  be 
the  fault  of  the  property  owners  of  New  York  and  the  organizations  in  case  this 
discussion  does  not  emphasize  the  real  needs  of  the  existing  situation  and  the 
real  grievance  of  taxpayers.  They  should  take  care  that  the  discussion  turns 
chiefly  upon  methods  of  economic  administration  and  the  problems  of  taxation. 
Every  candidate  of  all  the  parties  should  be  pledged,  if  possible,  to  a  definite  pro¬ 
gram  of  economy  and  of  tax  reform,  and  preparations  looking  in  the  direction 
of  effecting  these  results  should  not  be  left  until  after  the  summer  vacation,  but 
should  be  begun  during  the  spring  and  pushed  just  as  far  as  the  general  situation 
will  permit.” 


It  is  high  time  that  real  estate  owners  and  the  public  officials,  and  others 
responsible  for  this  condition  came  to  the  parting  of  the  ways. 

A  searching  exposure  of  the  facts  and  persistent  publicity  will  clear  the 
way  for  the  remedy  and  will  result  in  equitable  taxation,  lower  tax  rates,  a 
general  revival  of  interest  in  real  estate.  Thus,  the  best  interests  of  the  City 
would  be  conserved. 

We  have  long  since  learned  that  reforms  need  not  wait  for  a  change  of  ad¬ 
ministration. 

There  will  never  be  a  more  auspicious  moment  to  change  and  do  away  with, 
once  and  for  all,  a  Tax  Departmental  System  with  which,  it  is  obvious,  the 
object  strived  for  is  to  increase  the  real  estate  assessed  valuations  that  the 
borrowing  capacity  of  the  City  may  be  augmented,  and  to  meet  the  incessantly 
increasing  expenses  of  the  City  with  as  low  a  tax  rate  as  possible,  regardless  of 
the  City  Charter,  which  says : 

“Real  estate  assessed  valuation  shall  be  for  the  sum  which  real 
estate  would  sell  for  under  ordinary  circumstances.” 

There  are  over  500,000  separately  assessed  parcels  of  real  estate  on  the  tax 
rolls  of  the  City  of  New  York.  Were  these  owners  or  any  considerable  number 
of  them  to  make  a  concerted  effort  to  correct  the  Tax  Departmental  System,  it 
could  be  accomplished  practically  over  night. 

At  their  hands  any  resistance  by  the  few  city  officials  responsible  for  the  present 
deplorable  conditions  with  ample  power  to  remedy  it,  would  be  about  as  useless 
as  for  any  one  to  attempt  to  steer  an  ocean  liner  without  a  rudder. 

Ample  power  is  vested  in  the  Mayor  to  remove  Tax  Commissioners  who 
are  derelict  in  their  duty. 


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